In FY2020, the NOF Group selected priority ESG issues to realize the desired state set out in “NOF VISION 2025,” the Mid-term Management Plan formulated in FY2019.

We drew up a list of potential themes by adding new social issues and high-profile issues to the themes considered in the previous process. We classified and consolidated the themes as materiality factors with reference to various guidelines.

【Reference material】

• ISO26000
• GRI Standards
• SASB CHEMICALS
• International Integrated Reporting Framework
• SDGs
• Competitors’ material issues
• In-house workshops

We assessed the priority levels with which to tackle the materiality factors based on the two axes of “degree of impact on society” and “degree of impact on our company.” We also added the following elements to our considerations.

（1）Results of evaluation of NOF Group by ESG rating agencies
（2）ESG-related opinions received from shareholders
（3）Perspectives of issues pursued by the NOF Group in the past

After consolidating the opinions of the divisions responsible for promoting CSR activities, discussions were held by the Strategic Meeting, comprising titled Operating Officers, and the Sustainability Committee, chaired by the President, with Outside Directors participating as observers, to select materiality issues. The divisions supervising and responsible for each materiality issue also drafted indicators (KPIs) and numerical targets.

The Material Issues were approved by the Board of Directors. In addition, the indicators (KPIs) and numerical targets for each item were revised as appropriate based on the opinions of the Board of Directors. Based on this, the individual divisions have been carrying out their respective activities.

Each materiality item is reviewed at least once a year by the Sustainability Committee, with the lead departments reporting on KPIs performance to assess progress. In light of external requirements such as ISSB and SSBJ, as well as changes in the business environment and society, we will also continuously review the appropriateness of the materiality at milestones such as updates to the Mid-term Management Plan. In FY2025, we reviewed the materiality in preparation for the launch of the 2028 Mid-term Management Plan.